Uralkali May Backfill Dangerous Areas of Potash Mine #potash

OAO Uralkali is considering backfilling parts of its Solikamsk-2 potash mine that are at risk of collapse after flooding halted operations last week.

The world’s largest potash producer is in talks with Russia’s safety watchdog known as Rostekhnadzor about taking the measures in the western part of the mine, Chief Executive Officer Dmitry Osipov said, according to Uralkali’s press service. Halite waste would be used to backfill worked-out areas, the company said in a statement.

Uralkali is monitoring Solikamsk-2 about 1,600 kilometers (1,000 miles) east of Moscow after salty water, which dissolves potash, began pouring into the site on Nov. 18. A sinkhole as wide as 40 meters (131 feet) was found near Solikamsk-2 the following day.

“With the high level of water inflow that Uralkali has, it’s hard to imagine the mine will survive,” Elena Sakhnova, an analyst at VTB Capital in Moscow, said today. “It’s still possible that Uralkali will be able to mine some volumes during winter but the question of flooding may be back on the table when spring thaws come.”

While there’s no discussion about starting full or partial production, according to the company, some potash may be mined during the backfilling process, Osipov said. Uralkali’s press service declined to provide additional commentary.

The water inflows have stabilized, Russia’s Tass newswire reported on Nov. 21, citing the head of Solikamsk’s city administration, Sergey Devyatkov.

OAO Phosagro, which uses potash from Uralkali to produce complex fertilizers, said it agreed a supply deal for 2015 with the Russian company’s rival, Belaruskali. The company may purchase a combined 800,000 tons of potash from both producers next year.

“This contract enables us to continue to successfully hedge our risks related to the supply of muriate of potash to Phosagro’s production facilities in Volkhov and Cherepovets,” CEO Andrey Guryev said in the statement today.